NO service can be ‘force’ delivered. Imagine the govt giving incentives to P&G for female hygiene in rural India or to HUL and Colgate so that people brush their teeth. This cannot happen.

Similarly some pvt guy HAS TO SEE money in rural banking – then he will go. Urban India’s middle class is also not getting good service. A pvt bank like icici bank charges 750 for a bounced cheque and a Canara bank charges 55. Instead of cribbing, change the bank. As of now banking is extremely profitable – hence the Nirmal Jain crib on license. We need a Big Bazaar of banks too…

this is what the big boss of Mutual funds has to say…

I think time has come to give licenses to the organizations who will NOT put a branch in tier 1 city. That is the only way to push the banks to concentrate on rural area. In fact some regulation is needed to make sure that banking is available to poor indians.

All private banks are concentrating on NIM available from Tier 1 city. In fact that is the reason many are chasing banking license. It is possible that because of competition they will start looking at tier 2 and tier 3 cities.
The reality is once tap of free licenses is opened it is difficult to close.